Voyager Digital (Chapter 11), a crippled cryptocurrency brokerage, filed for Chapter 11 bankruptcy following last week’s suspension of deposits and withdrawals.
A series of collapsing cryptocurrency collateral is causing chaos throughout the industry, with giant corporations collapsing like dominoes. Most recently, Voyager Digital filed for Chapter 11 bankruptcy in New York, according to documents filed in court on July 5.
According to the application, Voyager’s assets and liabilities are estimated to be between $1 billion and $10 billion, with more than 100,000 creditors.
According to the announcement, it has about $1.3 billion in cryptocurrency assets and more than $350 million in cash in the For Benefit Of (FBO) for Metropolitan Commercial Bank customers.
The company is working to protect three properties: Voyager Digital Holdings, Voyager Digital LLC, and Voyager Digital Corporation.
On July 1st, Voyager Digital suspended trading, deposits, withdrawals, and loyalty rewards due to turbulent market conditions.
Chapter 11 complicates the bankruptcy process as the company can continue to do business while restructuring its legal responsibilities. The reform plan to be prepared in the future should put the interests of creditors first, and if the proposal is not satisfactory, creditors can propose a plan instead.
CEO Stephen Ehrlich said: “With a holistic overhaul, we can protect the assets of the platform and maximize the value of all stakeholders, including our customers.” He added that the Chapter 11 process “provides a fair and efficient mechanism to maximize reconstruction.”
Voyager proposed a “First Day” as part of a revamp to continue operations.
The proposed overhaul will revitalize account access and provide value to customers. However, court approval is required.
3AC recovery money
It has been announced that customers holding cryptocurrencies will receive their holdings, 3AC recoveries, reorganized common stock of the company, Voyager tokens, and more.
It is also reported that customers holding USD will be able to access their funds “after discussing with the Metropolitan Commercial Bank and completing fraud prevention procedures.”
3AC, one of the largest cryptocurrency-focused hedge funds in the industry, borrowed 15,250 BTC and 350 million USDC from Voyager. The Singapore-based company filed for Chapter 15 bankruptcy in New York on July 1st.